Economics and the Ecosystem
By Edward Fullbrook and Jamie Morgan
The overwhelming weight of evidence regarding our collective environmental consequences as a species suggests that the common sense of the last forty years is now forced to confront its own complacency.
Encouragingly the young seem particularly attuned to the scale of the problem they have been bequeathed. A call to sanity has been initiated. Are we sufficiently rational as a species to respond?
It now creates more problems than it solves.
Growth is now threatening the capacity of earth to support life.
Inevitably national growth economies reach a point where many citizens begin to suspect that growth is no longer worth the cost of excessively rapid adaptation to an accelerating economy of no return – that so-called economic growth has in reality become uneconomic growth.
Why is growth still the summum bonum of economists and politicians? Probably because growth is our substitute for sharing as a cure for poverty.
Growth in our finite and entropic world now increases ecological and social costs faster than production benefits, making us poorer, not richer (except for the top few percent).
Globalization is the effective erasure of national boundaries for economic purposes.
It follows that global economic integration logically implies national economic disintegration.
It is a victory for corporations relative to national governments, which are no longer strong enough to regulate corporate capital and maintain competitive markets in the public interest.
Of all things knowledge is that which should be most freely shared, because in sharing it is multiplied rather than divided.
Once knowledge exists, its proper allocative price is the marginal opportunity cost of sharing it, which is close to zero, since nothing is lost by sharing it.
I do question whether what we persuasively label “economic growth” is any longer making us richer.
Avoiding the uneconomic growth that is increasing the illth of nations will require clear and forceful policy to limit growth. All policy, especially such a radical one, requires a belief in both objective value and real alternatives.
Citizens really must affirm that the world offers more than one possibility to choose from, and that some choices really are better than others.
Indeed, our decision-making elites may already tacitly understand that growth has become uneconomic. But apparently they have also figured out how to keep the dwindling extra benefits for themselves, while “sharing” the exploding extra costs with the poor, the future, and other species.
1.How and to what degree is the economy changing the ecosystem? 2.How must economics change if it is to become a force for leading us away from catastrophe rather than toward it? 3.How can the global economy be changed so as avoid ecological collapse?
The global economy not only could but indeed, must, be changed if humanity is to even hope to be able achieve the transformation to an ecological economy.
Mother Earth is the source of life which needs to be protected, not a resource to be exploited and commodified as a “natural capital”.
“the collapse of our civilisations and the extinction of much of the natural world is on the horizon” (David Attenborough).
It has now been over half a century since the natural sciences began to discover that the economy was causing fundamental and irreversible changes to the ecosphere by which we and the economy exist.
In order for economic theory, teaching, and policy application to provide useful guidance in this time of great danger, it must change in many ways.
An economic theory that can help to mitigate the ecological and civilizational catastrophes bearing down on us must differ significantly from that which currently dominates policy-making.
A massive reversal of the interactions between humans and the rest of nature is essential – to turn away from spreading ecological destruction, towards restoration and renewal.
Growth drives energy demand up and makes it significantly more difficult – and likely infeasible – for nations to transition to clean energy quickly enough to prevent potentially catastrophic levels of global warming.
There are, broadly, two arguments for financializing nature. The first is a widely-held belief, inspired by neoclassical theory, that markets are the most efficient way to allocate scarce resources.
The second is that because public finance is on the wane, we must turn to private finance to meet social and environmental goals
We have argued that trading ecosystem-backed securities on financial markets will very likely undermine ecosystem function.
Ecosystems are under pressure from economic activity. This has led to efforts to place a monetary value on nature (valuation) in order to highlight what is being lost when ecosystems are degraded.
When they are appropriated and sold, as with natural resource extraction, there is an incentive to maximize the provision of income-generating services at the expense of broader ecosystem function.
In relation to climate change, the Intergovernmental Panel on Climate Change highlights that concentrations of CO2 and other greenhouse gases in the atmosphere have risen to levels that are unprecedented in at least the last 800,000 years.
Anthropogenic climate change did not emerge during the era of hunting and gathering or in agricultural societies but instead began with the Industrial Revolution, which itself was accompanied by an unprecedented increase in the depletion and burning of fossil fuels,
The depletion of resources is not only a physical and ecological, but also a political, social and ethical issue.
The Industrial Revolution introduced tools and machinery that reduced the role of many individual workers to that of an “appendage”.
Previous sections have demonstrated that any re-embedding of the economy into planetary boundaries is unlikely as long as the top priority of economic growth in policymaking is upheld.
The IPCC is not the only one warning that significant and qualitative changes in the structures of the global economy would need to be initiated very soon to have a realistic chance of keeping global warming near 1.5°C by the end of the century.
In a postgrowth context, the state’s policy priority of achieving economic growth would be replaced by the goal of reembedding production and consumption patterns into planetary limits.
If history is our guide, we can be sure that civilisation will collapse.
Using logical analysis (rather than wishful thinking) it is clear to see that collapse is inevitable on the path we are on.
The current global civilisation is not regionally based, or based on any particular cultural identity, but is connected through economic globalisation.
Instead of a maximised global economy operating without constraint, the world needs a civilised economy which supports human aspirations to live well into the long future.
We have allowed an economic system to evolve, and become deeply rooted in the current version of civilisation, which is in conflict with the ecosystem.
“The challenge is to reframe economics to support cohesive society living on a finite planet in ways which safeguard the ecosystem into the long future.”
We may perceive global warming, biodiversity loss, tropical deforestation, spreading marine dead zones, chronic air/water pollution, land/soil degradation, plummeting sperm counts, etc., as separate problems, but it is more realistic and potentially more productive to recognize that all are symptoms of a singular phenomenon, gross human ecological dysfunction.
This is a genuine global meta-problem; it is potentially fatal to civilization and, paradoxically, entirely self-induced.
Millions of lives may be jeopardized if those in positions of authority cherry-pick data guided by some dangerously faulty but comfortable social construct (climate-change denial, anyone?).
Any society that dissipates/pollutes its host ecosystems faster than they can regenerate/assimilate is inherently self-destructive.
“So, let us not be afraid of the truth. We don’t need to avoid our reality… We don’t know whether we will survive. We may. But if we do, it will be in an utterly different world, with almost no other living creatures to keep us company, poor food, rampant disease and a wildly uncomfortable environment”
Our best science tells us that the world is currently on track to experience three to five °C warming. There is no dispute that five degrees would be catastrophic, likely fatal to civilized existence. Even a “modest” three degrees implies disaster – enough to destroy economies, destabilize geopolitics and empty cities.
Untransformed, our present system will crash. We really have no choice but to act upon what our best science has been telling us for decades.
There is certainly no easy solution to humanity’s econo-ecological predicament and without an agreed emergency plan for cooperative action there may be no solution at all.
We now find ourselves facing a climate emergency: either we drastically suppress global CO2 emissions, and soon, or global warming will soar beyond any human power to restrain it, ecologies, farming and fishing will collapse and then civilization itself, perhaps before the century is out.
Three years on from Paris nothing has changed: Soaring emissions, shocking increases in CO2 concentrations, arctic fires and floods notwithstanding,
Governments, economists, even climate scientists continue to proffer the same old market-based fake solutions: steeper carbon taxes, unproven, impossibly expensive “carbon removal” technologies, and fabulist geoengineering schemes. Everything but the obvious – “deep emissions reductions in all sectors” at “unprecedented speed and scale.”
If we don’t organize an emergency industrial shutdown and retrenchment of unnecessary production, superfluous manufacturing, superfluous electricity usage, wasteful over-consumption, nature is going to do it for us in a most unpleasant manner.
Occasio-Cortez may be just 28 but she is a bold, feminist, anti-racist, and socialist-inspired successor to FDR. With this Green New Deal she's taking the global warming discussion to a new level, changing the conversation and challenging the political economy.
There is no Planet B. Let’s hope with a developing vision and that monumental mobilization around this Green New Deal we can derail that dystopia and build an ecosocialist civilization to save the human race.
The discipline of economics has played and continues to play a major role in leading humankind towards the ultimate calamity. It is driven by world views and their ontologies, which are more based on Newton’s mechanics than rooted in modern science’s understanding of systems complexity
In short, economics has to be reinvented if it is to become a force for leading us away from catastrophe – rather than toward it.
The state of planet Earth is widely recognised as in jeopardy due to a range of environmental problems relating to a dominant economic system that extracts resources and uses energy on an unprecedented scale in human history.
Despite their ever increasing type, number and scale, environmental problems are treated by most economists as isolated, individual instances of market failure.
In short, it is a total fiction that bears no relationship to actual environmental problems operating in a complex open systems reality, and as a result it produces policies that fail.
Beyond the basic failures of mainstream economists, there is a much larger failure of the economics profession in general, and that is a lack of relation to the natural world.
Why mainstream economists, who have no theory to address past transitions, should predict a smooth future transition in the face of resource and exergy depletion, appears explicable more as a matter of blind faith than economic science.
Economics, to be of use for the future, must address how to meet basic needs through social provisioning, not how to create markets for profit making. Billions suffer deprivation of food, water, shelter and sanitation. The variety of economies that might operate to address these issues is not even on the research agenda.
To suggest ways out of the current social ecological crisis, we need an economics that can lead us away from catastrophe rather than towards it.
The global economic system and the cultures of consumption it celebrates are failing both people and planet.
There has been insufficient recognition of the way all the major global problems derive primarily from having exceeded the sustainable limits to growth.